Transregional and transnational value transfer: the role of social control and trusting attitudes between the agents

Unofficial transregional and transnational value transfer systems, which act in parallel with formal banking channels and wire transfer systems, are widespread in developing economies. Given an absence of formal regulation and enforcement, their stability can be bolstered by norms of social control and trusting attitudes among their participants. In this paper, we discuss the outcomes of game-theoretic modeling of the informal value transfer system called ‘hawala’.